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United States Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Sep 2011, Pages: 103
Business Monitor International's (BMI) United States Pharmaceuticals and Healthcare Report (Q4 2011) provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United States’ pharmaceuticals and healthcare industry.
BMI View: The US pharmaceutical market is under increasing pressure. The faltering economy and precarious fiscal situation mean the government has fewer funds for healthcare programmes such as Medicaid – a scheme for those on low incomes. Suppressed consumer spending will also negatively affect the over-the-counter (OTC) medicine sector and dent demand for discretionary prescription drugs. Nevertheless, the US market will remain the primary destination for companies selling patented, generic and over-the-counter (OTC) medicines. Although emerging markets will drive industry growth over the medium term, these markets are small and, on an aggregate basis, are dwarfed by the US pharmaceutical market, which is supported by the world's largest economy and a political framework that endorses free pricing.
Headline Expenditure Projections
- Pharmaceuticals: US$327.03bn in 2010 to US$331.30bn in 2011; +1.3% growth in local currency terms. BMI’s forecast has been revised down moderately from Q311 due to analyst intervention.
- Healthcare: US$2,346bn in 2010 to US$2,450bn in 2011; 4.5% growth in local currency terms. BMI’s forecast has been revised up moderately from Q311 due to analyst intervention.
- Medical devices: US$127.6bn in 2010 to US$133.1bn in 2011; 4.2% growth in local currency terms. BMI’s forecast has been revised down moderately from Q311 due to analyst intervention.
Business Environment Rating: The US registered a Q411 Pharmaceutical Business Environment Rating (BER) score of 77.9 out of 100, which is unchanged from the previous quarter. The country performs well above the regional average for all indicators, highlighting its attractiveness to multinational drugmakers. Perhaps the only area of under-performance is low single-digit growth of the pharmaceutical market, but this is to be expected from a developed state.
Key Trends & Developments
- In August 2011, Perrigo concluded the takeover of privately held pharmaceutical manufacturer Paddock Laboratories for US$540mn in cash. The acquisition of Paddock's assets is expected to generate a tax benefit of US$95mn for Perrigo. US-based Watson Pharmaceuticals purchased a portfolio of Perrigo's generic pharmaceutical products that were divested as a result of the Paddock acquisition.
- In July 2011, The US Food and Drug Administration (FDA) granted marketing approval for Brilinta (ticagrelor), developed by AstraZeneca, for the reduction of cardiovascular deaths and heart attacks in patients with acute coronary syndromes (ACS). The positive opinion follows data from the PLATO study, which involved 18,624 patients. The agency asked the company to include a boxed warning on the drug label regarding a reduction in its effectiveness if taken with more than 100mg of aspirin per day.
- In July 2011, Swiss pharmaceutical group Roche lost a hearing seeking approval for the use of its breast cancer drug Avastin (bevacizumab). An advisory committee of the US FDA voted 6-0 for withdrawing the drug from the US market. The committee stated that the drug did not work well in follow-up studies and can lead to the risk of deadly bleeding. The court ruling has disappointed several breast cancer patients who testified that the drug saved their lives. The drug will remain on the market as it is approved for colon, lung, brain and kidney cancers.
BMI Economic View: On August 03 2011, BMI revised down its US growth forecasts, in light of the downward revisions to the historic GDP series by the Bureau of Economic Analysis, as well as a lower than expected Q211 figure, both of which were released on July 29. While these indicators are backward-looking, there is evidence of slowing economic momentum and consequently BMI has revised down its H211 growth profile, putting growth at 1.7% in 2011 and 2.6% in 2012.
BMI Political View: The Standard and Poor’s (S&P) downgrade of the United States' credit rating, amid rising concerns about US debt, will inevitably reinforce suggestions that the era of American global hegemony is ending. However, BMI asserts that while the US' economic woes will accelerate its relative decline, none of its competitors is ready to step up to global leadership, meaning that the US will remain the world's premier power, albeit in an increasingly multi-polar world.
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